Research in Motion Q2 Fiscal 2011 Results Announced

Research in Motion
By Kevin Michaluk on 16 Sep 2010 04:27 pm EDT
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* Update - After hours trading has the stock up over 7% on RIM's record profits. The Globe and Mail just posted a good article summarizing everything - read it here. It's clear a lot of the current sales and growth are coming internationally while North America is flattening out a bit with the competition from Apple and Android increasing. Listening to the Q&A though, the team seem very upbeat about the future quarters and Jim said we're going to be pleasantly surprised at DevCon, which kicks off on Sept. 27th. I can't wait! *

Research in Motion just posted their 2nd Quarter fiscal 2011 results (yes 2011 is right... that's how RIM reports. not a typo)....  the investors call starts at 5pm ET so tune in if you want to hear from RIM's Co-CEO Jim Balsillie first hand on their performance (I'll be listening). You can listen here. We'll report back with more once the call is over. In the meantime, check out the press release below!

Press Release

Research In Motion Reports Second Quarter Results

WATERLOO, ONTARIO--(Marketwire - Sept. 16, 2010) - Research In Motion Limited (RIM) (NASDAQ:RIMM)(TSX:RIM), a world leader in the mobile communications market, today reported second quarter results for the three months ended August 28, 2010 (all figures in U.S. dollars and U.S. GAAP).

Highlights:

  • Revenue grew 31% over the same quarter last year to $4.62 billion
  • Earnings per share in the second quarter increased 76% to $1.46 over the second quarter last year(1) 
  • BlackBerry(R) smartphone shipments grew more than 45% over the same quarter last year to 12.1 million and RIM has shipped approximately 115 million BlackBerry smartphones to date 
  • BlackBerry subscriber account base grew approximately 56% over the prior year to over 50 million

Q2 Results:

Revenue for the second quarter of fiscal 2011 was $4.62 billion, up 9% from $4.24 billion in the previous quarter and up 31% from $3.53 billion in the same quarter of last year. The revenue breakdown for the quarter was approximately 79% for devices, 17% for service, 1% for software and 3% for other revenue. During the quarter, RIM shipped approximately 12.1 million devices.

Approximately 4.5 million net new BlackBerry(R) subscriber accounts were added in the quarter. At the end of the quarter, the total BlackBerry subscriber account base was over 50 million.

"RIM set another new record in the quarter by shipping over 12 million BlackBerry smartphones. This accomplishment and RIM's solid financial results during the second quarter were driven by effective business execution and strong demand for RIM's portfolio of BlackBerry smartphones and services in markets around the world," said Jim Balsillie, Co-CEO at Research In Motion. "We expect a continuation of this momentum in the third quarter as we extend the rollout of new products including the BlackBerry Torch into additional markets and benefit from heavy promotional activities and increasing customer demand as we head into the holiday buying season."

The Company's net income for the quarter was $796.7 million, or $1.46 per share diluted, compared with net income of $768.9 million, or $1.38 per share diluted, in the prior quarter and net income of $475.6 million, or $0.83 per share diluted, in the same quarter last year. The impact of Q2 share repurchases on second quarter fiscal 2011 earnings per share was approximately $0.02 per share.

The total of cash, cash equivalents, short-term and long-term investments was $2.03 billion as at August 28, 2010, compared to $3.27 billion at the end of the previous quarter, a decrease of $1.24 billion from the prior quarter. Cash flow from operations in Q2 was approximately $938 million. Uses of cash included common share repurchases of approximately $1.5 billion, business acquisitions of approximately $320 million, capital expenditures of approximately $200 million and intangible asset purchases of approximately $100 million.

Q3 Outlook

Revenue for the third quarter of fiscal 2011 ending November 27, 2010 is expected to be in the range of $5.30-$5.55 billion. Gross margin for Q3 is expected to be approximately 42%. Net subscriber account additions in the third quarter are expected to be in the range of 5.0-5.4 million. Earnings per share for the third quarter are expected to be in the range of $1.62-$1.70 per share diluted.

Conference Call and Webcast

A conference call and live webcast will be held beginning at 5 pm ET, September 16, 2010, which can be accessed by dialing 800-814-4859 (North America), 416-644-3414 (outside North America). The replay of the company's Q2 conference call can be accessed after 7 pm ET, September 16, 2010 until midnight ET, September 30, 2010. It can be accessed by dialing 416-640-1917 and entering passcode 4310309#. The conference call will also appear on the RIM website live at 5 pm ET and will be archived at http://www.rim.com/investors/events/index.shtml.

(1) Earnings per share in the second quarter of fiscal 2010 included a charge of $0.20 relating to the settlement of all outstanding worldwide patent litigation with Visto Corporation.

Topics: News & Rumors

42 comments

mattpowell19

for all this apple talk and them being better then RIM and making their new Iphone, RIM is doing damn good. There is no way I will go away from RIM. They are a very reliable comapny that I hope is around for a long while! Hopefully Q3 will turn out for the better!!

jwmax

The much maligned (media, blogs) and loved (by those that actually bought one) BB Torch is going to be huge for RIM. They are going to roll it out to 70!!! carriers by Christmas....

312

Glad to read this.

dwaynewilliams#WN

Doesn't sound like they are going to be bought out anytime soon.

John Yester

RIM is not going anywhere.

Crackberry_Canadian

to see how the newspapers spin this into more doomsday talk regarding RIM.

BlackBerry.est08

Based on revenue, they can't say much but we're still waiting for ASP. RIM is successful with the lower end market (Curve and Pearl lines) but I think investors and analysts want to see RIM do more in the high end to do more against phones like the iPhone and EVO.

WillieLee

Bears might latch onto net new subscribers but other than that they have nothing to justify their negative calls.

Margins, revenue, devices shipped, net income not only beat consensus but RIM's own guidance. And third quarter guidance is extremely strong and seems to hint that a tablet will be coming. Good day for RIM!

Irving94

I already know how they're going to spin it. If you check the report, the amount of new Blackberry subscribers was less than expected. That was the only bad thing in the report, prepare for that to be highlighted by tech blogs everywhere.

On a side note: RIM really needs to appeal to the high-end smartphone market again. Their phones are using crappy hardware result in low prices which is fine for some models but all? C'mon... Storm3 with a 1.2 ghz processor anyone? lol

valorian

There must not be as many people moving from BlackBerry to iPhone or Android as some people are saying for RIM to be selling this many phones and show these kinds of financial numbers.

AceCK88

Kevin,

You've made a mistake on the subject heading, don't you mean Q2 2010 Results announced? Or is this what RIM is predicting for 2011! LOL

Kevin Michaluk

FISCAL 2011.  not calendar year.  it's rim's q2 fiscal results for 2011.  that's how they report. 

so nope, no mistake on my part.

thatsean

It's good to see that RIM are doing well, it would be interesting to understand the movements of subscriber by customer type to see how well they are doing in the consumer space. That said, there must be strength in the lower value consumer offering. I've had Blackberries for two years now and it's a good platform, I'm off to IPhone next month, but I'm sure that Blackberry will do well if RIM strengthen their consumer offering. The torch is a good start, but I don't think it's much more than that! Good to see RIM are still in the running though!

xiaohuaxing

"Q2 2011 Results Announced".... Stupid lol

Kevin Michaluk

umm.. sigh.. sorry bro, i'm not the stupid one.  read the press release. it's FISCAL 2011 q2.  rim doesn't report on the calendar year.

 

jetman1287

Didn't come to light until the past year, so I think it's a little early for reflection on what they did just recently. Also, remember that the entire phone market is growing and I'd like to see some comparative data to other providers.

The BB base rose 55%, but what about smartphones as a whole? Or other platforms?

jjetson

http://www.tuaw.com/2010/08/12/android-sales-worldwide-pass-iphone/

Heres a comparison from last month.

Android 3% more that iOS.
RIM 1% more than Andriod, so 4% more than iOS

for market share

also shipped more units than both Android and iOS.

WillieLee

This is a hard figure for comparison. RIM is the only company that provides new and current subscriber numbers. It has also been something that is used against them so they are going to stop providing that data.

When Gartner or IDC report market share, they are not just talking about smartphones. Symbian includes netbooks, iOS includes the Touch and now iPad, etc.

What's more important is their financial performance and profit. And of all the companies, only Apple is posting higher profits.

jacmeister68

Cmon guys. these results show that RIM are producing solid numbers.
That's all that matters all the other stuff mentioned by some of the posts is pure b\s.

maxiang

How many times Kevin is going to have to tell the people that don't read that it is FISCAL year 2011 :D
On the one hand, I'm glad to see RIM doing so well. On the other hand, I kinda want them to have a bad year so they get hungry and go on the hunt :D

jwmax

All the short sellers are pulling their iPhones out of their asses. :-)

No matter what the droid and iPhone fan bois say a lot of people just lost a ton of money shorting RIM

Tripster

I am loving this report and amazed, much appreciated Kevin.

mrlee7

I feel we are in the early stages of mass smart phone adoption. RIM will see growth as it has been a well establish manufacturer of smartphones.

Having said that apple and google have tapped into this market as well, and will grow along with their hardware partners.

When it comes to a smartphone buyer these days there are two types:

- the buyer who puts emphasis on utility and communication
- the buyer who puts emphasis on media

All smartphones can do what I mentioned above, but some do it more EFFICIENTLY.

Most of these new buyers, put an emphasis on media. Hence the iphone and android offerings appeal more.

I think days ahead for RIM are bright if they can bring the two together. It's not that hard to do.

In fact we see that with the OS 6. RIM just needs better higher-end offering to match the software.

The got the "lower-end" down with the pearl and curve series.

It is easier for RIM to acquire the features of iphone and android (hardware and software), then it is for apple and google to acquire essence of what makes blackberrys, well, blackberrys.

This all of course is my unprofessional opinion.

pattste

Excellent results indeed. All the Android and iPhone fanboys who've been trashing BlackBerry in the CrackBerry forums can eat crow.

The smartphone market is growing by leaps and bounds. It is ridiculous to expect RIM, once pretty much the only player in the game, to maintain its marketshare as major competition enters the market. It is also unrealistic to expect RIM to disappear or become marginal in the coming years.

What we are going to see in the coming years is that all the major platforms (BlackBerry, Apple, Android, Nokia) are going to be strong and each will find their market. We may even see HP/Palm and Microsoft re-enter the market with competitive products. One thing is for sure, it's going to remain interesting to watch this industry for many, many years.

gbsn

I bet most of the international shipments go to Venezuela hahaha. People there are like blackberry eating machines, even though they cost like 5x normal cost in usd. Weird fact.

coolt86

I think IBM will buy RIM!

br14

As Jim Balsillie says, the negativity by some analysts is driven not so much by RIM's performance as by their desire to short the stock or other narrow agenda.

The fact is that in the last quarters reported, BlackBerry outsold iPhone by around 4.5 million.

And all this talk of Android is crazy. Android is an OS not a device. Compare Samsung, LG or HTC with RIM for sure. But not the OS. On the basis of OS, Symbian is still the biggest.

I don't suppose numbers are available, but I imagine a great many of those "Android" sales are to people who previously owned Motorola or Samsung phones. And not necessarily that many switching from other devices - though certainly there will be some.

Not that RIM should relax - nor does it seem that they are. But the "RIM is dead" talk seen on some analsyt blogs is ridiculous.

mjth61

I'm really surprised, confused by you folks writing these articles. When BB has a Great Quarter you all over it, but if they have a bad quarter, or the analyst take it or analize it into a bad quarter there is nothing on this site about it, or if it is it's days later. Get Real and tell it like it is, good or bad! Don't get me wrong I love my BB, but I think this stock is being raped by analyst. Thanks, I vented.

jjetson

Honestly I just did a quick google search and found RIM's last 4 quarters reported on crackberry. I didn't go back any further but I'm pretty sure they report them all.

Skeevecr

I think you are confused about which site you are on, crackberry always seems to report the quarterly results promptly and as far as the actual results it is the latter situation of analysts spinning good results into something that fits their agenda.

Interestingly, I notice that when Rim have had a quarter where they even beat their own estimates, there seems to be a distinct lack of reports on the results from most of the other gadget blogs like bgr, would they have been as slow to report if there had been something they could twist negatively I wonder.

WillieLee

It's not just the tech blogs. Last quarter when RIM missed several estimates there were numerous stories from print media outlets flying within five minutes of the start of the call. This time most of the stories didn't come out until thirty minutes after the start.

Now they are waiting for someone to tell them that it was negative so tomorrow it will be all about the net new subscribers even though the negative analysts spent the last month talking about how the India and Middle East problems were going to impact net new subscriber numbers. So the lower numbers shouldn't have been a surprise to them.

Very few are going to talk about Q3 guidance which is far beyond anything even the positive analysts were estimating. RIM just can't get respect.

green_ember

You can tell that the media is not interested in being fair to RIM. I was watching NBC this morning when they reported RIM beating expectations. The clip they showed while talking about it was a blue device with a black and white screen with a click wheel on the side. The Blackberry logo at the top of the device didn't even use the 7 dots. For F*#K'S SAKE! Really????? There's no way they would ever show a device that old when talking about any other manufacturers. Complete and total BS. I guarantee there are now people who after seeing this story will think that this is the type of device RIM offers today...

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nikesu

I'm with RIM.....just for one reason....that's Hardware. I do not like touch-screen, slide-out keyboard, folding phone etc. I really like the form factor of Bold series (except 9800). And there's no other alternative to that except nokia e72(closest one).
I think RIM is lucky in this regard as everybody is busy going after iphone and wanna be so called iphone-killer. In the process, they forgot ppl like me. The day...co like htc, samsung come up with device(non-touch) similar to Bold...I'm out of RIM's noose.

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rim should there hear to stay and all those analyst were pretty much saying they were sinking and they showed they are climbimg those analyst are just loving to short this stock i dont get it anymore i cant wait till devcon !!!

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